George Osborne: Public rightly angry about bad bankers - as it happened
UK chancellor vows to avoid repeat of the 2008 financial crisis, at the Bank of England's first Open Forum
- Draghi: Eurozone needs full banking union ASAP
- Osborne: Wrong that shoplifters jailed, but not bad bankers
- Mark Carney: I won't hug a banker
- Public don't think banking is fixed
- Exclusive: Inside the Bank of England
5.38pm GMT
Despite more weak Chinese data and worries about US rate rises in December, markets have recovered a little poise. A spate of well received earnings reports from Europe, including Carlsberg, helped matters, while the AB InBev bid for SABMiller also lifted investors' spirits. The final scores showed:
5.25pm GMT
You heard him! Drinks on Mark #BoEOpenForum
5.24pm GMT
And then Carney is gone, after a promise of drinks in the crypt for those in the Guildhall, drinks on the Daily Mail's Alex Brummer for those who attended his session in Edinburgh and for those at home, drinks in the local pub on the Bank thanks to its QE programme.
5.20pm GMT
Carney: [It is] the responsibility of authorities to explain why things are being done. Lot of postings said there is a lot of jargon...even as we are trying to explain things.
5.16pm GMT
In his closing remarks, Bank of England governor Mark Carney - who maintained his net contribution was to come up with the words Open Forum - repeated the disconnect between the sector and the public:
We are all going to go back and reflect on what we've learned.
5.03pm GMT
As we edge towards the close, both the Bank's Jon Cunliffe and chair of this final panel Sir Richard Lambert agree the discussion has been useful and should continue after this event finishes.
4.58pm GMT
Giles Fraser says its time to get rid of acronyms - it's a part of group think we should do without.
Call by @gilesfraser for ban on acronyms goes down well in Edinburgh #BoEOpenForum
4.44pm GMT
Sir Jon Cunliffe, deputy governor at the Bank of England on credit:
John cunliffe responding to my earlier Q: ''credit is a public good like water - like water you can drown in it.'' Quite so. #BoEOpenForum
4.40pm GMT
A rival candidate for quote of the day, from the final panel going on now. Talking about debt and credit, the Reverend Canon Giles Fraser said:
We are approaching this terrible time called Christmas.. go into the Westfield shopping centre and you'll see tens of thousands of people buying lots of things they don't want with money they don't have for people they don't like.
We're encouraged to do this because of this thing called growth. I worry about moral hazard of debt...
4.28pm GMT
Nobody knows how money works these days, we just hope it's there when we need it - quote of the day Blythe Masters #BoEOpenForum
Blythe Masters, the chief executive of Digital Asset Holdings, was speaking at one of the afternoon sessions.
4.25pm GMT
But there is a divergence between how the bankers and the public think reform of the sector is going:
Great comments by Gillian Guy @CitizensAdvice on gulf between industry and public on how banking reform is going #BoEopenforum
'Not enough for the public to understand finance. The financial industry needs to understand the public'. Gillian Guy at #BoEOpenForum
4.23pm GMT
Adding to the theme of banking and its wider role in society as heard at the Bank of England's open forum, Mark Taylor, Dean of Warwick Business School and a former senior economist at the Bank, said:
Mark Carney is on a charm offensive in order to encourage the public to think about bankers in a better way. After all we need a strong financial sector, it represents eight per cent of the UK's GDP and 20 per cent of income in London alone. It is an important part of the economy, and in order to grow other sectors like manufacturing we need a strong financial sector. But the banking sector needs to act ethically and in the best interests of society for it to work properly. We need bankers to think of their impact on society and not just on their wallet.
4.03pm GMT
European Central Bank president Mario Draghi may not have caused any market moving sparks in his speech at the Open Forum earlier.
But Reuters is reporting that the ECB is considering extending its QE programme by buying municipal bonds of cities like Paris or regions like Bavaria, according to sources. Reuters says:
This regional bond buying could be one in a series of measures to be rolled out in the coming months, although one of the sources said time was short for a full launch in December and that this would likely come by March next year.
The ECB declined to comment.
3.51pm GMT
Back with the Bank of England's Open Forum, and here's something to illustrate the main themes, ahead of the day's summing up.
Here's some of the key themes and challenges coming out of #BoEOpenForum drawn by our visual artists pic.twitter.com/wEo8fKFd5x
3.47pm GMT
Elsewhere, the Bank of Spain has said the country's third quarter GDP grew 0.8% quarter on quarter.
It repeated its estimate of 3.1% growth in 2015 and 2.7% in 2016. But it admits the risks to these forecasts have increased since June.
3.41pm GMT
Meanwhile in Greece, the country's banks will need less than a10bn for recapitalisation, MNI is reporting.
3.13pm GMT
There's not much to argue with here....and maybe that's the problem:
Participants in the Edinburgh #BoEOpenForum are reporting back on the themes of their round-table discussions pic.twitter.com/rusB3xCnIk
Increasing financial education, transparency, trust and responsibility are big themes of the groups' findings so far #BoEOpenForum
3.11pm GMT
Some analysis of Draghi's speech:
This speech is definitely a thinly veiled attack on Cameron's vision of a capital market union supervised by natl institutions #BoEOpenForum
Just read this whilst listening at #BoEOpenForum - Draghi makes the case for the EU if you want a single market https://t.co/M3yg2DezwV
3.03pm GMT
Superb comments by @MazzucatoM on how rent-seeking and VC short-termism undermine value-creating financial innovation at #BoEOpenForum
3.00pm GMT
Professor Mariana Mazzucato has been busy debunking hype in the world of financial innovation.
She told a panel at the Open Forum that many new wizzy ideas have actually helped companies to extract wealth, and give very little back society:
Financial innovation has increased outsized free riding/rent extraction effect in GDP not reduced it, says @MazzucatoM (my hero)
We need the right sort of innovation, not rent seeking innovation, says @MazzucatoM #boeopenforum
2.53pm GMT
Has the Bank of England done any war gaming and worked out under what conditions it would intervene in the markets?
Couldn't possibly say, Minouche laughs. But generally, Bank officials have done a lot of work on this general issue to prepare for a liquidity crisis.
2.40pm GMT
Axel Weber, chairman of UBS, warns there is a 'vacuum' in the markets now as some institutions - such as UBS - no longer act as market makers.
He cites the impact of new tougher regulations, which make it too risky and costly.
2.37pm GMT
Flicking between this afternoon's discussions at the Open Forum, there's a lot of talk about market liquidity.
Asset managers are explaining that liquidity could easily evaporate once the next crisis strikes, as many investors have already cut their exposure to riskier assets.
Liquidity is a public good, and central bankers have a duty to guarantee it.
2.24pm GMT
Over on Wall Street, e-commerce magnate Jack Ma is preparing to ring the opening bell:
MOMENTS AWAY: Alibaba CEO Jack Ma rings the NYSE opening bell from China & then joins @SquawkStreet LIVE. pic.twitter.com/COPNZMfEbR
2.18pm GMT
There are now more 'breakout sessions' underway - you can follow them here:
2.11pm GMT
What does Mario Draghi mean when he calls for a "uniform deposit insurance scheme"?
Well, back in June, he and four other eurozone presidents called for an EU-wide deposit insurance by 2017. That would sit on top of existing national deposit schemes, providing extra protection.
1.47pm GMT
This is a bit harsh:
#Draghi nods off during his own speech pic.twitter.com/sy5VG9KsS3
1.45pm GMT
And that's it! Draghi isn't taking any questions, much to my dismay.
And the speech didn't contain anything to get the markets moving - no hints about future stimulus measures.
whaT. zero zip nada hint from #Draghi regarding expand/extend QE or possible cut in deposit rate @CNBC
Latest bit of commentary from Draghi & co is a bit...boring. Nothing too revealing or interesting yet re: December policy action. $EURUSD
1.43pm GMT
The eurozone does already have some banking union, with the ECB responsible for banking supervisions.
But it doesn't yet have a uniform deposit insurance scheme. This is still controlled by national governments.
Draghi: In Europe national policymakers cannot fully protect citizens without pooling more sovereignty #BoEOpenForum
Draghi: ECB banking supervision benefits citizens, member countries and the single market #BoEOpenForum
1.38pm GMT
OK we've got to the meat of the speech.
Mario Draghi is urging eurozone leaders to crack on and actually implement a full banking union across the eurozone, including a single deposit insurance scheme to protect savers when their bank fails.
With a single currency the benefits of a single market are commensurately higher. But the costs of the market fragmenting are commensurately higher, too. For countries that share a single currency and a single market, therefore, the case is clear - I would say almost undeniable - for stronger common governance and deeper institutional integration.
Today, that means as a priority completing banking union: a fully-equipped single resolution mechanism and a uniform deposit insurance scheme.
Draghi: To reap benefits of open and free markets appropriate governance is necessary #BoEOpenForum
Those countries have entered into an irrevocable union, built on the fertile ground of Europe's common values and history, but also on deep mutual vulnerability. For those countries it is even more important to complete economic and monetary union in all its aspects.
1.32pm GMT
Draghi adds that attempts to clean up the asset-backed securities market after the 2008 crash also caused problems:
There was "too much opacity" about what had been bundled into those products, a damaging breakdown of confidence in the integrity of those who packaged and sold them.
And the immediate temptation of regulators was to impose punishing capital charges on holdings of asset-backed securities, independent of their individual characteristics, mixing the wheat with the chaff.
1.28pm GMT
A proper market must offer the freedom to take part, and also protection to ensure that freedom isn't lost, Draghi continues.
There must be fair competition, respect for property rights... in short, the Rule of Law.
During the crisis, the market for securitised assets was all but destroyed by a collapse of confidence. Lack of oversight allowed excesses to be committed and market abuse to take place. Securities that were previously deemed safe, certainly with some measure of complacency and too much blind confidence, turned out to be very unsafe indeed, and imparted significant losses on their holders.
1.24pm GMT
Global trade is more important and intertwined than ever, Draghi says, with technology means distance between buyers and sellers is no longer as important.
Global markets are also more closely linked, with the cost of moving capital between borders now almost zero.
1.22pm GMT
Draghi begins by saying that markets can be defined by the instruments traded on them - oil, gold, etc - but they're also defined by the people who use them.
And you need appropriate governance to prevent misconduct - especially when markets cross borders.
1.20pm GMT
Lunch is over at the Guildhall, and Mario Draghi is taking the stage at the Bank of England's Open Forum.
He'll be speaking for 45 minutes on the financial markets.
1.15pm GMT
In other news, the car emissions scandal appears to be spreading beyond Volkswagen.
German regulators have announced they will test 50 models from 23 different brands, issued by German and foreign car companies, to see if they also breach nitrogen oxides emissions levels.
German motor vehicle watchdog widens diesel probe to 23 brands: FRANKFURT (Reuters) - Germany's ... https://t.co/R1wwqunPNg ... #business
12.41pm GMT
In 30 minutes time, Mario Draghi will give his views on financial markets to Forum attendees - who are currently knocking back some lunch.
The ECB president seems to be enjoying his visit:
12.40pm GMT
Andrew Bailey, the Bank's deputy governor for Prudential Regulation, has spoken about the challenges in running a 21st century bank:
BoE's Bailey makes a great point: To mitigate terrorism risks as a bank, you make sure you can move services across locations seamlessly.
But to mitigate cyber attack risks, you want to do the opposite, as you want to limit ways people can access your system. Big tension.
12.34pm GMT
A km worth of legal docs required for review and action on new regulation... #BoEOpenForum pic.twitter.com/9mAXynTrUz
Hard to believe that anyone has actually read so many pages, let alone implemented it properly....
12.26pm GMT
From the Open Forum, lawyer Robin Henry confirms that the public are more sceptical about the state of Britain's financial sector than the people regulating it:
Clear from comments that regulators' rosy view of reforms is not shared at all by the public #BoEOpenForum
Many comments on the need to move away from top down regulation of the financial markets #BoEOpenForum
12.17pm GMT
Is it time to stop raking over off the mistakes that helped to cause the financial crisis?
Tracy McDermott, who runs the UK's financial watchdog (the FCA) suggests it might be:
McDermott is asked at #BoEOpenForum if the FCA is going soft on banks. She says its time to start looking at the future
11.57am GMT
The Bank of England is also conducting opinion polls; they've showed that people don't believe the financial system is working well enough:
Clear answer to Question 1 posed on #SME finance at #BoEOpenForum - Not enough being done to improve credit access pic.twitter.com/jA9KhBT1Hm
80% participants say UK economy too dependent on bank debt - Live questions at #BoEOpenForum breakout session. pic.twitter.com/y5HLVnFCbt
11.56am GMT
One problem with playing host to the world's biggest banks is that they often collect the world's biggest fines:
#BoEOpenForum. Four uk banks in top 10 of world's most fined. So proud. pic.twitter.com/FPsS9eoXg1
#BoEOpenForum just heard "here's a list of bank fines....we can be proud we have 4 banks in the top 8".... Everybody starts laughing ?!?!?
11.46am GMT
One attendee has already warned that innovation can't be chained down:
Provocation from the audience at #BoEOpenForum 'rules don't work - I'm an innovator and will work around them'
11.45am GMT
Financial economist Jonathan Algar puts his finger on the problem with 'professionalising' the City:
Term "banker" been used generically at #BoEOpenForum. BoE aspire to make it a profession. Problem: in reality, not a job with a standard..
..set of skills. Even within cap mkts banking, syndication & origination totally diff skills, cultures. Then there's structures, quants,..
11.43am GMT
Various breakout sessions are now taking place at the BoE's event:
Jill Treanor is tweeting the key points from the Guildhall:
Acting FCA Tracey McDermott at #BoEOpenForum says traders were "operating in a little bubble where [they thought] rules didn't apply"
RBS chairman Sir Howard Davies tells #BoEOpenForum the bank is trying to again public approval by rooting the bank to customer needs
11.23am GMT
I missed this, unfortunately, but it's a key issue:
'Laughs' at my question at #BoEOpenForum - do we want the biggest banks the the world? I don't think it's that funny....
11.14am GMT
The thorny issue of the huge pay packets handed out in the City has finally reared up at the Guildhall.
The public believe it is a crucial cause of the crisis - so will it be fixed?
If the City and the financial markers are serious about achieving a genuine social licence, real action needs to be taken on pay because it remains a grotesque disparity.
10.59am GMT
Jim O'Neill has warned the audience that there will be new financial crisis sooner or later.
But if we have more diverse companies operating in the sector, the damage might be less.
A financial crisis will happen again says Lord Jim O'Neill at #BoEOpenForum More diversity needed, the Treasury minister says
10.56am GMT
There is a bit of a theme developing, about conflict between desire for safety and need for risk-taking to support growth #BoEOpenForum
10.51am GMT
This is crying out for a caption competition.....
10.50am GMT
It's a similar message in London:
Who feels "it's job done" in terms of regulatory changes, the room at #BoEOpenForum is asked? two or three hands go up..
10.49am GMT
There's not much confidence in Birmingham that the financial markets are fixed.
The Bank of England has set up a smaller forum in Britain's second city, to shadow events in London.
10.39am GMT
Treasury minister Jim O'Neill, a former top executive at Goldman Sachs, cautions against thinking that the financial crisis can be easily 'solved'
It's right that we're trying to explore why the hell it was so bad...but we have to also acknowledge that we might not fully know.
It's dangerous to think we'll find some magical solution to protect us for decades ahead.
10.36am GMT
A panel discussions is now underway now in the Guildhall.
Rabbi Baroness Neuberger is taking a historical view, saying bankers have been criticised for several generations - and they're always relieved when another industry is hit by scandal (such as Volkswagen's emissions scandal or the oil spill in the Gulf of Mexico).
Julia Neuberger tells #BoEOpenForum that bankers were relieved by the VW and BP oil spill disaster
10.31am GMT
While Osborne was speaking, new data showed that Britain's unemployment rate has hit a new seven-year low of just 5.3%.
But it's not all good news - wage growth was weaker than expected. Average earnings rose by 3% annually in the last quarter, but only 2% in September alone.
Touching distance. UK unemployment falls to 5.3%, a whisker away from 2000-07 average of 5.1%. pic.twitter.com/goiGmZrXW2
#Employment rate 73.7% for Jul-Sep 2015, highest since records began in 1971 https://t.co/Cx4CoquCVb pic.twitter.com/pW6dHUMoYK
For Jul-Sep 2015 wages up 3.0% on a year earlier including bonuses, & 2.5% excluding bonuses https://t.co/ujz2apLFKh pic.twitter.com/C8pmI6prQ6
10.11am GMT
10.06am GMT
Does George Osborne understand why the public are still so angry about the crisis, and believe that the people responsible never paid a penalty?
He says he does, telling the Bank of England's Open Forum that it's perfectly understandable.... and he shares some of this frustration and anger.
If you go and shoplift at the local WH Smiths you go to prison, but if you're the market trader on the trading floor of a big investment bank and you rip off people to the tune of millions of pounds, there are no criminal offences available to deal with you.
There was a lot of totally understandable anger.
This was the biggest single economic crash of our lifetimes.
This was a financial crisis probably larger than anything experienced since the Victorian age in our country, and an economic crash and a recession as great as anything since the 1930s.
9.52am GMT
A questioner from the floor challenges Osborne on that last point.
She points out that big fines are paid by shareholders, not the staff responsible. And the 2008 bailouts were paid by the taxpayer, not the bankers who led their firms to the cliffedge.
When I got into office [after the 2010 general election] and found out about the scandal, I changed the law.
9.49am GMT
Onto questions: Would a bankers code of conduct help to restore financial trust?
Osborne says that Banking, like the medical profession, engineering, architecture, has a proud history. The best practitioners want to enhance that status, and regulated by the industry itself as well as the government.
If anyone thinks being unethical in the financial services industry is a good way to make money, I'd suggest they take a look at the very, very large fines that a number of institutions have had to pay.....and ask whether it was worth it.
9.42am GMT
George Osborne also congratulated the Bank for running a webinar for school children this week, and admitted it was a new term to him.
Osborne #BoEOpenForum didn't know the word "webinar" - good example of top politicians' isolated; no wonder their actions often out of touch
9.41am GMT
George Osborne says that his predecessor, Alastair Darling, had very few options when Royal Bank of Scotland hit the rocks in 2008.
9.37am GMT
Osborne says 'the uk wants to have the biggest banks in the world' - do we? Not everyone does #BoEOpenForum
9.33am GMT
Chancellor George Osborne is now speaking, discussing the financial crisis, its aftermath, and the 'dilemma' created when you try to run successful markets.
He explains that Guildhall was once the place where people turned up to pay their taxes, so the attendees are all 'very welcome'.
Osborne "dilemma between risk and safety for financial markets" #BoEOpenForum
9.31am GMT
Carney "don't just want to end boom and bust cycle but also regulatory reform and complacency cycle" #BoEOpenForum
9.26am GMT
A date for the diary:
"5 years from now, UK financial services will be the best regulated in the world" - Mark Carney at #BoEOpenForum
9.25am GMT
Anyone hoping for a smaller City will be disappointed, though.
Carney argues that, done right, Britain's financial sector could be bigger than ever in the decades ahead.
Financial sector 'could increase from six to nearly 15 times UK GDP by 2050', Carney says. City going to be bigger than ever ....
9.22am GMT
We have also reformed financial benchmarks to end 'ethical drift', Carney adds.
9.19am GMT
Mark Carney explains that new rules on loss-absorbing capital mean that banks will no longer be 'too big to fail.'
The era of 'heads I win, tails you lose' capitalism is drawing to a close.
9.16am GMT
Mark Carney is now speaking.
He's explaining how it's vital that financial markets work well, and are seen to work well.
So, it's not surprising that only one third of people think financial markets work in the interest of society.
9.10am GMT
London's Lord Mayor is kicking the Open Forum off, telling the audience that every firm in the financial sector must be "fully engaged" in society, so they're doing good for Britain.
He then plugs his own City Giving Day, which pushes firms to volunteer and fundraise for good causes.
9.06am GMT
The Bank of England's Open Forum is starting now in the Guildhall, just across the road from its own building - you can watch it live here.
8.52am GMT
Banking still looks something like this, but it's changing, says Mark Carney. pic.twitter.com/3i8e5bAAR5
8.49am GMT
And here's the agenda of today's Bank of England Open Forum, which kicks off in a few minutes.
(The 'senior Cabinet Minister' is chancellor Osborne)
8.43am GMT
Today's Open Forum is part of Carney's drive to end the Age of Irresponsibility in the City.
Those attending will hear from the chancellor, George Osborne, as well as Carney, Draghi and many senior figures in the sector:
The latest attempt by the government to rehabilitate the battered reputation of the City of London takes place on Wednesday when Mark Carney, the governor of the Bank of England, invites the public to have their say on the future of financial markets.
Carney has invited the chancellor, George Osborne, and the president of the European Central Bank, Mario Draghi, to be the guests of honour at a day-long event at the Guildhall in London.
Related: Bank of England chief to host forum on how to make markets safe
8.36am GMT
Mark Carney will soon find out whether the public respect bankers -- 200 people won tickets to today's Open Forum in a ballot:
The venue for today's #BoEOpenForum. Good that 200 members of the public will be there, not just bankers. @Peston pic.twitter.com/DkOXn6sVop
8.27am GMT
The interview ends on a mildly comedy note, as Sky's Eamonn Holmes asks Mark Carney how he copes with such Clooney-style good looks in the world of central banking.
"It's a very low bar", Carney twinkles back.
Eamonn Holmes to Mark Carney on @Skynews: "You are the George Clooney of the banking world." Carney: "It's a very low bar."
I think Raghuram Rajan is more attractive than Carney, but I'm in a small minority of financial journos.
8.14am GMT
Mark Carney has also vowed to 'root out' the remaining 'bad apples' in the banking sector.
He told Sky News that "the system is changing" so remaining bad apples in the barrel are held to account.
We'll still work and root out those bad apples, but we need to recognise there is a lot of good in financial services. It makes a huge contribution to our economy.
I might not be hugging any bankers, but increasingly the British people will be respecting them.
8.03am GMT
The governor of the Bank of England governor has ruled out 'hugging any bankers', as he prepares to welcome the public to its first Open Forum in London.
"I think what's happening now is that the bankers are starting to be part of the solution, not part of the problem."
I won't think you want your governor giving that kind of advice....Neither I nor my successors will be hugging any bankers.
Head of @bankofengland, #MarkCarney, is convinced #bankers are now "part of the solution", not problem #BoEOpenForum https://t.co/dFCn7xNEMq
7.40am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Today we'll be looking at the UK economy, with the latest unemployment report released at 9.30am GMT.
A strong wages number will further reinforce the widening gap between wages and inflation and raise concerns that the Bank of England is not only behind the curve, but is on the way to being lapped.
Excited about the #BoEOpenForum tomorrow? A huge variety of stakeholders will map a positive future for markets https://t.co/XqZxYRIHC7
BofE's Open Forum with 50% general public with a # for twitter questions. Blimey. Its modern for the old lady of thread needle st.
Sainsbury's underlying pretax profit down 18% to 308m in first half, like-for-like sales down 1.6%
Sainsbury's says food sales down nearly 1% in first half but clothing up 10%
Fresh round of talks today in Athens btwn #Greece Mins & officials and Quadriga heads. Gaps hv narrowed but an agreemnt's still not in sight
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